Thank you.
Let me start by saying it's a privilege to be here today to share some of my experience and expertise in the field of the geology of rare earth metals.
I would like to build my short presentation around some of the previous testimony of experts who have appeared before this committee, and emphasize some of the geological aspects of the problem as well as address and focus on some of the issues that do not appear to have been adequately addressed in previous testimony.
As you know, the 14 lanthanide elements and yttrium, collectively known as rare earth metals, are a staple ingredient in numerous advanced materials that enabled the advent of new technologies, cutting-edge technologies. They have also been used to improve the efficiency, eco-friendliness, and economic aspects of existing materials to make them ultimately more marketable.
Let me emphasize also that the practical importance of these metals goes well beyond wind turbines, hybrid and electric vehicles, energy-storage technologies, compact fluorescent lights, and these kinds of things, which are collectively known as green or environmental technologies. For example, out of some 70,000 tonnes of neodymium-iron-boron magnets that are manufactured every year, only about 15% are actually used to manufacture traction motors, wind turbines, and these kinds of things, with the remainder going into more mundane products ranging anywhere from magnetic resonance imaging to air conditioners, loudspeakers, hard drives, compact drives, and so on.
Today, global rare earth production amounts to about $4 billion U.S. annually, which is about three times less than the global value of diamond production, for example. At the same time, global sales of diamond jewellery amount to merely $70 billion U.S., whereas rare metals, and in particular critical metals like rare earth metals, provide a basis for a manufacturing sector valued at anywhere between $2 trillion and $4.8 trillion. So there's a significant difference in perspective here in terms of the ultimate practical value between these commodities and diamonds, for example.
According to some recent studies, including a study by MIT scientists, some of those metals will skyrocket in importance, and industrial need for these metals will increase by as much as 2,600%—as in the case of dysprosium, for example—by the year 2025. If we take this projection seriously we should be looking at a significant increase in the demand for these elements. In the absence of current efficient recycling technologies, it's quite obvious that we'll have to come up with adequate resources to support this increasing industrial demand, which will outpace the current or historical production trend of about 5% in the recent 30 years.
To address these looming shortages in critical metals, including five of the 15 rare earth metals—dysprosium, terbium, ytterbium, neodymium, and europium—governments around the world, as well as research organizations and companies around the world, focus their efforts on three main areas: recycling of the existing products; developing substitute materials that would allow the minimization of the use of rare earth metals, so perhaps eliminating rare earth metals from some of the technologies; and diversifying the existing supply sources.
So it's that latter area where I think Canada has some really great opportunities. In Canada no rare earths are currently being produced, and rare earth products account for about $30 billion in monetary value, which is less than 2% of the national GDP, as well as less than 2% of employment. This is several per cent less than Japan, for example, which does not have its own rare earth mines either. But Japan imports 15% of the Chinese rare earth production. About 80 years ago the Russian geochemist Alexander Fersman dubbed rare earth metals “vitamins for the industry”. Deng Xiaoping was the first political leader, political figure, who recognized the importance of these metals in that context and that ultimately led to China's dominance on the rare earth market. If Canada built on that potential and utilized its own resource potential it would not only be able to provide the rest of the world with sustainably sourced rare metals including critical rare earth metals, but it would also provide a much-needed vitamin boost to its own rare earth-based advanced technologies and industry.
Geologically speaking Canada is just as complex as China and it has all the prerequisites including tectonic, and geochemical, and geological prerequisites to the development of economic rare earth mineralization. So, for example, if you look at the historic figures that are currently available in the public domain, the total measured, and indicated, and inferred resources of rare earth metals in this country amount to about 38 million tonnes of contained rare earth oxides. Now, this seems like a lot because it is basically 30% of the global resource base at the moment. But at the same time, these numbers, when taken out of their geological context, can be misinterpreted.
I'll illustrate that with a couple of examples. For example, if you look at the Nechalacho project in the Northwest Territories, which actually ranks fairly high among the currently active advanced-level exploration projects in Canada, you will see that only about 13% of Nechalacho ore is actually composed of minerals like monazite, bastnäsite—and their chemical composition is given in a transcript of my presentation—whereas the rest of these metals, roughly about 87%, are distributed among zircon, allanite, and various other minerals. The reason it's important is that, historically, the bulk of rare earth production around the world has come from bastnäsite, monazite, to a lesser extent ion-absorption clays like the ones that are mined in China, and to a much lesser extent from xenotime. So that means that minerals like zircon, allanite, and the rest of the minerals that are present in such significant quantities in the Nechalacho ore actually have not been used for profitable recovery of rare earth elements to date.